March 2, 2009 / 3:19 AM / 9 years ago

More aid for AIG cheaper than a collapse-source

WASHINGTON, March 1 (Reuters) - Pumping $30 billion more of U.S. taxpayer funds into embattled insurance giant American International Group Inc. (AIG.N) is ultimately cheaper than letting it collapse and endanger the broader economy, a person familiar with the matter said on Sunday night.

The U.S. government will announce the latest cash infusion for AIG on Monday morning, along with a series of other measures that are designed to better position it to sell some assets and try to find a route toward long-term viability.

The source, who spoke on condition of anonymity, said AIG posed a significant systemic risk for the U.S. financial system and as long as that was the case there might be a need for continued government aid.

Reporting by Glenn Somerville; Editing by Tomasz Janowski

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